We expect the international investment community to continue purchasing U.S. financial assets, and in particular to continue financing the U.S. budget and trade deficits. … READ MORE >
Joseph Brusuelas
Fed pauses rate cuts as inflation flattens out and policy changes loom
The Fed’s decisions set up an inevitable clash with President Trump, who is on record as wanting lower rates in contrast with the hawkish pause adopted by the Fed. … READ MORE >
Morning market minute: The questions that Powell will not want to answer
Jerome Powell’s answers to questions about trade and fiscal policy will drive volatility given the sensitivity of the U.S. 10-year Treasury yield and the American dollar to growing policy uncertainty. … READ MORE >
Morning market minute: Managing the dollar’s risk, volatility and tariffs
A look at the implied volatility of the dollar-euro pair suggests that there is ample room for dollar weakness and volatility until tariff policies are resolved … READ MORE >
Morning market minute: A look at the U.S. trade and current account balances
To narrow the U.S. trade and current account deficits, the Trump administration has said it would take the external route—using tariffs as leverage to narrow the deficits with the Chinese and other trading partners. … READ MORE >
Morning market minute: The contradictions at the heart of U.S. economic policy
The Trump administration’s policies will cause the trade and current account deficits to widen, not narrow. … READ MORE >
Morning market minute: Bond market volatility and the Federal Reserve
It is time for the Fed to drop its over-emphasis on data dependency and move to a more strategic view that takes into account the risks to the outlook that will be front and center this year and next. … READ MORE >
To understand rising rates and volatility, look to regime change in global economy
Gone is the era of low inflation, low interest rates, a global savings glut and sagging aggregate demand. In its place is a new framework featuring scarce capital, insufficient aggregate supply, higher inflation and higher interest rates. … READ MORE >
Morning market minute: The political economy of demographic growth
Underlying demographic realities show that those current policy preferences for immigration restrictions stand at cross-purposes with the needs of the U.S. economy.
… READ MORE >
Morning market minute: Modeling the impact of tariffs
A simple exercise that assumes tariffs of 25% across the board and 60% on Chinese goods implies that the U.S. economy over the next decade would be approximately 2% smaller than it otherwise would be. … READ MORE >